
THIS ISSUE: 25 Jan - 31 Jan
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Clicks Front and centre
Not that we were asking, but here’s an 18-week trading update for Clicks, to the end of December. Group sales were up a solid if unexciting 11.7% to R5.97billion, in line with other retailers, although Clicks itself grew sales 8%. Within this, dispensary sales grew by 9% and front shop sales by 7.6%. The main growth came through its pharmaceutical distribution business, UPD, which upped the ante to the tune of 20.3%, although it carries lower margins than the retail businesses. Musica grew 1%, affected by the closure of seven stores, and no doubt looking nervously over its shoulder at the advent of iTunes, while the Bodyshop managed a fragrant yet wholesome 10.2%. According to Mr Kneale, punters waited until the last minute before commencing their holiday spending frenzy last year.
Comment: We still have a great idea for the turnaround of the Musica business, if anyone is interested.
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Boxer Fighting fit
Having begun life as a handful of privately-owned retail-wholesale hybrid stores in the bucolic retreats of KZN, Boxer Superstores has evolved to fast become a retail model of How It Is Done, and the rough-hewn gem in the Pick n Pay crown right about now. And if by some slim chance they were not yet significantly on your radar, how’s this, they’ve just opened their 150th store, having cut the ribbon on 20 new stores in 2012 alone. One of the reasons for their success – and perhaps for the slightly below the radar nature of their impressive growth – has been their strong local focus, as a brand which both courts and supports the communities in which its stores are located, spending millions over the years on bringing a relevant value for money offering, on the donation of staple foods, services and funds to those in most need, and tens of millions on community initiatives through its willingness to evolve the brand to the ever changing needs of all South African shoppers.
Comment: And all this at arm’s length from the mothership, which gives them a lot of latitude to keep on doing well what they’re doing right.
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Woolworths Bags of good ideas
The Dapper One is, we are told, intensifying its support for the little feller, with R4.3million in loans disbursed last year to smaller suppliers, who jointly also benefited from business opportunities to the tune of R157million. Through its enterprise development wing, Woolies now does the right thing by 40 small businesses, who jointly employ over 5,000 South Africans. In addition to market access, Woolies gives these businesses training that covers best practice in technical and business management skills and organisational development. A typical enterprise is the Greater Uitenhage Sewing Co-operative (Gusco) in Nelson Mandela Bay, which supplies Woolies with those classy reusable bags you’ve been meaning to put in the boot for ages. Gusco, which signed Woolworths up as its first customer, is an amalgamation of several informal community sewing groups.
Comment: This is the stuff which gets us out of bed in the morning. Nice one, that tastefully discreet Samaritan.
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Unilever Waste not, want more
Unilever has achieved the incredible goal of reducing to zero the waste sent to landfill by 50% of its factories, or looking at it another way, 100% of factories in 18 of the countries in which it operates. Or one million household bins. And it sends no hazardous waste to landfill from 130 of its factories around the world. All of this while achieving sales of €51billion, up from €40billion when it set out its vision of doubling the size of the business whilst reducing its environmental impact and increasing its positive social impact. The reduction in waste has been achieved by the elimination of waste from the manufacturing process, and by the recovery and recycling of what does remain. The current goal is to bring waste levels in 2015 – by which time output will have significantly increased – below 2008 levels.
Comment: Governments may drag their heels and Kyoto may come and go, but some of the world’s great businesses are getting on with the good and serious business of saving the planet regardless.
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SABMiller We’re only here for the cerveza
Seeing as we’re into interims and updates season, let’s have a look at The Big Guy, which has just released its interim management statement for the quarter to December: Lager volumes up 2% globally, with soft drinks up 3%. Total volumes grew 6% and group revenue 17% compared with the third quarter of the last FY. The big story here is Latin America, where lager volumes were up 6%, compared with Europe’s flaccid 1%, and which contributes over a third of SAB’s earnings before interest and dividends etc. Volumes were up 3% here at home, in the market which made SAB great, while in the querulous Antipodes and the rest of the Asia-pacific region, volumes were down 1%, as a result of the (nevertheless improving) slowdown in Aus after the Fosters acquisition, and slackening demand from China.
Comment: There’s the world as we know it. And then there’s the World of Beer.
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Consumer Credit A credit to our species
South African spent over R116billion on their credit cards in December, would you believe it. But before you get too excited, a piffling R40billion of that was on retail, while R20billion was squandered on travel, eating out and entertainment and another R20billion blown on car related expenses like fuel, tolls and chrome spinners for the Ford Fiesta. The average value of transactions, you will be further chastened to learn, was only 5.6% higher than last year, exactly in line with inflation, and the lowest increase since the hardly-heady days of 2009. On the upside, supermarkets and petrol stations (including, presumably, forecourts) were the largest recipients of this dwindling largesse, followed by department stores and restaurants. 18million-plus transactions took place in supermarkets, hooray. According to those in the know, punters invested in food, furniture and clothes for the family rather than taking everyone to Plett.
Comment: Very sensible, too. But buy more food next time.
IN BRIEF
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SPAR The drifting sands
SPAR International now has 12,000 festively-liveried stores around the globe, but is not stopping there, oh, no. They’re going into the Middle East now, with plans to open 30 stores by 2015, kicking off in Abu Dhabi, Qatar and Lebanon before donning its Lawrence of Arabia robes, saddling up its finest racing camel and venturing further into the United Arab Emirates, Oman and Saudi Arabia.
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Adcock Ingram The Mysterious East
Adcock Ingram have concluded the acquisition of Cosme Farma Laboratories Limited, a pan-Indian pharmaceutical company based in Goa, for R745million, or something or other in rupees. This with a view of finding gainful employment for Cosme’s 1,000-plus employees and building a growth base on the subcontinent, with its massive market of people crying out for quality affordable prescription and over the counter medication.

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